Ed Koch Comes Out (Mostly) Against The Living Wage Bill

The New York Times came out in favor of a living wage bill earlier this week, and today Ed Koch sent a message to his email list outlining his own thoughts on the bill.

In short, the former mayor is against it, even though he favors an increase in the minimum wage.

“I would support a national law creating a minimum wage of $10 plus benefits or $11.50 per hour without benefits, or any other reasonable increase for those at the minimum wage level. But I would do so only if it applied to all states, not simply to New York City,” he writes.

Mr. Koch goes on to urge lawmakers not to give in to the city’s labor unions, and said he “fears” for a city in which labor holds undue sway again.

I hope the City Council is not emboldened to do what the labor unions are demanding of them – their role is to engage in collective bargaining — especially now that the New York Times editorial board has given the City Council cover. I truly fear for the future of this city as the pressures build on the candidates for Mayor and the City Council to support and enact such legislation, and the excesses of the days of “Fun City.”

The mayor cites the empty Kingsbridge Armory as an example of why businesses will flee the city if a living wage is enacted. During the Kingsbridge fight, the Council tried to force a living wage mandate on the developer, who resisted, and declined to build in the long-defunct site. It is worth noting however at the time that even some supporters of Kingsbridge said that the problem was requiring a living wage around one site in the entire city, something this legislation is designed to redress.

Full email from Hizzoner below:

The following is my response to a New York Times editorial of December 26, which endorses City Council legislation now being considered. The legislation would provide for the so-called “Living Wage” law requiring developers who receive public subsidies of $1 million or more and those conducting business in the development to pay their workers wages substantially above the national minimum wage for the next ten years.

The Negative Impact of an Imposed Living Wage

The New York Times editorial of December 26, entitled “A Living Wage, Long Overdue” supports legislation pending before the City Council to require developers receiving public subsidies of $1 million or more to pay to the holders of full-time jobs a “living wage” defined as $10 per hour plus benefits or $11.50 per hour without benefits for at least ten years, which pay scale effectively for those developers seeking city subsidies to build becomes the city’s minimum wage, contrary to the federal minimum wage of $7.25 per hour now mandated and binding in the U.S.

Bizarrely, the Times editorial proposes an exception, stating, “The bill’s sponsors should also consider exempting grocery stores in areas that need fresh food markets.” Why not exempt all projects in areas of the city desperately in need of jobs? The unemployment rate for minorities in the country is double that of whites. In black and Hispanic communities, the unemployment rate is over 18 percent. Perhaps the Times writer is a vegan.

In support of its position, the Times cites an expert in Los Angeles which adopted a “living wage” law, “that he was unaware of any project that was cancelled because of the wage requirement.” The Times editorial writer had only to look at the Times’ own news stories to learn that in the Bronx in 2007 when the City Council imposed such a requirement on a developer that would have developed the Kingsbridge Armory in the Bronx into a retail mall making available 575,000 square feet, providing private sector construction jobs and permanent jobs in the businesses created, the developer withdrew its offer to go forward. That Kingsbridge Armory remains undeveloped to the present day. No jobs, no taxes, no upgrading of the neighborhood.

I would support a national law creating a minimum wage of $10 plus benefits or $11.50 per hour without benefits, or any other reasonable increase for those at the minimum wage level. But I would do so only if it applied to all states, not simply to New York City. We live in perilous times. In Europe, the European Union is trying desperately to prevent five nations – Portugal, Italy, Ireland, Greece and Spain (PIIGS) from going bankrupt. All of those nations apparently lived beyond their means, taking on national debt to provide services which they could not afford and creating private sector benefits raising the cost of doing business that helped bring these nations to their economic knees. If raising the minimum wage to $10 and $11.50 is such a good idea, why didn’t the progressive Democrats do it nationally when they had majorities in both Houses? Why didn’t the President at that time offer such a program?

Does it make sense for New York City to risk its economic future and see developers turning to New Jersey, Connecticut and other states in the Northeast, rather than come to New York City to build, creating construction jobs and permanent jobs in the new businesses established? I hope the City Council is not emboldened to do what the labor unions are demanding of them – their role is to engage in collective bargaining — especially now that the New York Times editorial board has given the City Council cover. I truly fear for the future of this city as the pressures build on the candidates for Mayor and the City Council to support and enact such legislation, and the excesses of the days of “Fun City.”